Sasol Limited Reports Decrease in Earnings Amidst Challenging Economic Conditions

  • Sasol Limited reports a decrease in earnings due to a challenging economic environment and volatile oil prices.
  • Revenue declined to R136.3 billion, with EBIT falling by 34%, attributed to lower chemical product prices globally.
  • The interim dividend dropped significantly to 200 cents per share, reflecting the company's cautious financial management approach.
Sasol Sandton

Sasol Limited has released its reviewed financial results for the six months ending 31 December 2023. Despite operational improvements in South Africa, the company experienced a decline in earnings, citing a volatile macroeconomic environment, weakened oil and petrochemical prices, unstable product demand, and inflationary pressure as contributing factors.

Earnings Performance:

Sasol’s financial performance for the first half of 2024 reflected significant challenges stemming from the global economic landscape. The company reported a revenue of R136.3 billion, down from R149.8 billion in the prior period, primarily due to lower chemical product prices across all regions. Earnings before interest and tax (EBIT) stood at R15.9 billion, marking a substantial decrease of R8.3 billion (34%) compared to the previous period.

The company attributed this decline to lower revenue and reduced gains on the valuation of financial instruments and derivative contracts, offset by lower chemical feedstock prices in various regions. Additionally, remeasurement items of R5.8 billion were recorded, mainly driven by impairments of key assets due to a further deterioration in the macroeconomic outlook and reduced market demand.

Key Metrics:

MetricHalf Year Ended 31 Dec 2023Half Year Ended 31 Dec 2022Change %
EBIT (R million)15,92524,204(34)
Headline earnings (R million)12,85119,389(34)
Basic earnings per share15.1923.23(35)
Headline earnings per share20.3730.90(34)
Interim dividend (Rand per share)2.007.00(71)

Dividend Decline:

In response to the challenging financial landscape, Sasol’s board of directors declared an interim gross cash dividend of South African 200 cents per share for the six months ended 31 December 2023, a significant decrease from the 700 cents per share declared in the prior period. The decision reflects the company’s commitment to prudent financial management amidst prevailing economic uncertainties.

Outlook and Caution:

Sasol remains cautiously optimistic about its future prospects despite the current economic challenges. The company continues to focus on operational efficiency and cost optimization measures to mitigate the impact of volatile market conditions. However, it acknowledges the need for vigilance and flexibility in navigating the evolving economic landscape.

Related

Rateweb

South Africa’s primary source of financial tools and information

Contact Us

admin@rateweb.co.za

Disclaimer

Rateweb strives to keep its information accurate and up to date. This information may be different than what you see when you visit a financial institution, service provider or specific product’s site. All financial products, shopping products and services are presented without warranty. When evaluating offers, please review the financial institution’s Terms and Conditions.

Rateweb is not a financial service provider and should in no way be seen as one. In compiling the articles for our website due caution was exercised in an attempt to gather information from reliable and accurate sources. The articles are of a general nature and do not purport to offer specialised and or personalised financial or investment advice. Neither the author, nor the publisher, will accept any responsibility for losses, omissions, errors, fortunes or misfortunes that may be suffered by any person that acts or refrains from acting as a result of these articles.